The VIX closing in to a 30+ year low
A boring day for the markets but the VIX did put in a 7% down move. Complacency continues to dominate. I also look at the daily chart for the USD which remains in a downtrend and does not show a lot of potential to break this downtrend. As for the precious metals… at least we didn’t see the stocks sell off. Already a better start than last week.
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Click here for the most recent COT report presented by Scotiabank.
Epsrtein End of Day:
https://youtu.be/6tW7YNy2_9g?t=32
How Gold is Different
“The present world gold market negates the true value of gold
by removing the “real demand” that “gold settlement” creates!
Break the mechanics of this market and you will find that
gold is the most valuable currency in today’s currency arena.
Many investors, today think that the answer to this dilemma
is for traders to take delivery and cause a short squeeze.
My friend, in this arena, taking delivery means settling in cash!
No, this market will not be destroyed by anyone but itself.
…just as ten people can’t physically possess the same ounce
of gold, nine of them are going to court to make the others
perform what physics will not allow!
…1. the current gold price is mostly a paper contract fabrication
2. it’s easily controlled as long as the “current price setting system” is functioning
3. this gold price everyone uses, could fall through the floor if the contract system comes into question
4. physical gold prices could skyrocket in the future as no one accepts the credibility of any contract for derivative gold.
Effectively destroying the paper equity of gold banking. Most of the people in the gold industry do not want to hear this. For them, a break-up of the London gold market would destroy their financial partners and spike the physical gold price into uncontrolled levels.
…It seems every Gold bug sees only half the trade and has great faith that contract law will favor a short squeeze. Yet, none of them see where it’s the longs that will be dumping and forcing the discount!”
-FOA
_________
This is a repost from the Speakeasy: In a recent comment, I wrote:
“…it is one of the key differences between a Freegold understanding and the rest of the gold bug sphere. They all believe that the paper market is ultimately subservient to the physical side…”
I want to explain this in a little more detail.
http://fofoa.blogspot.com/2017/05/how-gold-is-different.html
North Korea has stopped becoming a laughing stock, now the news in Canada is trying to prepare us for a limited nuclear engagement. If North Korea uses an atomic bomb 72 miles above Kansas, Canadians will not escape the electro magnetic pulse. Almost all our infrastructure is located alongside the American border. We are all in this together and I doubt our government in Canada has protected the power plants. Dumb, dumb, and dumber, what does it take? DT
Protection of the grid costs between $200 million and $1 Billion, plus labor, to get about 90% of the grid back up,depending on whether you want the grid back up within a few weeks or a few days.
The unknowns are how many hukes are in orbit on satelites…..are there several up there to give multiple EMP attacks at weekly or monthly intervals?
Estimated time to get grid back up without preparations is over a year.
Compared to what the NSA spends on surveillance, it is peanuts. But government has its own priotities
3 Primary #Silver Producers in the United States
$CDE Coeur Mining, $HL Hecla Mining and $USA $USAS Americas Silver are three of the largest primary silver producers in the United States.
“The US was one of the world’s top silver producers in 2016, recording output of 1,100 MT. That’s slightly more than its 2015 total of 1,090 MT.”
$KTN $KOOYF Kootenay Silver President and CEO Jim McDonald talks about the company’s three major silver assets in Mexico and the company’s plans for 2017.
“Kootenay has three key assets, including the La Cigarra silver project in Chihuahua, Mexico, and the Promontorio and La Negra silver projects in Sonora, Mexico. With a combined NI 43-101 resource estimate of over 140 million ounces of contained silver, the company has one of the largest silver asset bases in the country.”
Kootenay currently has two drill programs in progress in Mexico at its La Negra and La Cigarra projects. At La Negra, the company has a carried interest to commercial production with $PAAS Pan American Silver, which commenced a drill program in March 2017 to define the potential size of the deposit. At La Cigarra, Kootenay commenced a drill program in April 2017 aimed at expanding the current resource base.”
Silver Miners (Producers and late stage developers) – [Comparative Table]
The Hedgeless Horseman – May 8, 2017
KOOYF….LOOKS….GOOD…..OOTB
Yes, Kootenay Silver is a very well run Silver Exploration and Development company, and having Pan American Silver as partner gives them solid footing and a potential takeover partner down the road.
Commodities, gold and other assets seem to have dropped to an unsastainable or margin call level….regarding derivatives and bonds…hence, no collateral to back up squat..
Joe Mazumdar’s Update On Junior Mining At Metals Investor Forum
05/08/17 – Interview by JORDAN ROY-BYRNE CMT, MFTA
https://thedailygold.com/joe-mazumdars-update-on-junior-mining-at-metals-investor-forum/
This was a pretty good interview where Jordan and Joe touched on different sub-sectors of miners, different jurisdiction risks/rewards, and eventually a rundown in Gold, Copper, Zinc, and Uranium.
Worth the listen, (and it comes with clanking plates in the background).
For TMM shareholders and others interested. Worth reading
https://seekingalpha.com/article/4070859-timmins-gold-sum-parts
Gold holds near seven-week low as safe-haven demand fades
Reuters – May 9, 2017 – By Swati Verma
“Overall sentiment has been turning from risk aversion to normalized risk tolerance levels, so we can see that demand for gold has been decreasing,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.
“Elsewhere, Wall Street’s volatility index, which measures implied volatility of stock options and is often seen as an investor fear gauge, closed at 9.77 on Monday, its lowest since December 1993.”
“The fall of the volatility index further hollows out the safe-haven bid that has underpinned gold for most of 2017. Should volatility remain becalmed, gold may find itself on the losing end of a deeper correction to the downside,” said Jeffrey Halley, senior market analyst at OANDA.”
https://finance.yahoo.com/news/gold-near-7-week-low-010528482.html
Gold: Summer Doldrums Tactics
Stewart Thomson – May 9, 2017
http://www.321gold.com/editorials/thomson_s/thomson_s_050917.html
The Cathode is the Key to Advancing Lithium-Ion Technology
JEFF DESJARDINS on May 8, 2017 – The Visual Capitalist
“The lead-acid battery, which is the traditional battery used in the automotive sector, is as easy as it gets. Put two lead plates in sulphuric acid, and you’re off to the races.
However, lithium-ion batteries are almost infinitely more complex than their predecessors. That’s because “lithium-ion” refers to a mechanism – the transfer of lithium-ions – which can occur in a variety of cathode, anode, and electrolyte environments. As a result, there’s not just one type of lithium-ion battery, but instead the name acts as an umbrella that represents thousands of different formulations that could work….”
http://www.visualcapitalist.com/cathode-advancing-lithium-ion/
UAE Completes Construction Of First Nuclear Reactor In The Arab World
By Zainab Calcuttawala – May 08, 2017
“The Arab world’s first nuclear reactor was completed in the United Arab Emirates on Saturday, symbolizing the region’s slow march towards renewable and alternative energy sources.”
“By 2020, the Barakah plant will add three more reactors to its facility, making it capable of fulfilling 25 percent of the nation’s 5,600 MW energy demand for the next 60 to 100 years.”
Anybody have any insights regarding the $WKM $WKLDF West Kirkland Mining Inc. trading halt? They are moving into development at present.
* Could it be a capital raise to get the projects moving towards Production?
In their May 1st press release where they discussed allowing Waterton to earn in 25% on the Hasbrouck #Gold project they had this caveat in there:
“Waterton has indicated their intention to fund their 25% share of expenditures. However, should Waterton choose not to fund their share of expenditures, their interest will be diluted according to a prescribed formula in the LLC agreement.”
http://www.wkmining.com/_resources/news/nr_2017_05_01.pdf
** My guess is that Waterton has decided to make a go of it.
West Kirkland Mining Inc – Corporate Presentation
http://wkmining.com/_resources/presentations/2017-03-03-WKM-Corporate-Presentation.pdf
Ah…. Here was the reason for the Trading halt on (WKM). Nice!
__________________________________________________________________________
West Kirkland Mining Buys 1.1% NSR Royalty at Hasbrouck in Exchange for TUG Project Interests
(Marketwired – May 9, 2017) –
“West Kirkland Mining Inc. (WKM)(WKLDF) announces the execution of an exchange agreement with Newmont Mining Corporation whereby the Company has exchanged all of its rights, title and interests in, and its obligations associated with the TUG Property, located within the Long Canyon Trend of northern Nevada/Utah, for an approximate 1.1% net smelter returns (“NSR”) royalty forming part of Newmont’s 2.4% NSR royalty on the Hasbrouck Gold Project, located near Tonopah, Nevada, plus the right to US$1.194 million in payments due upon commercial production at Hasbrouck or Three Hills and extinguishment of land fees.”
“The Company now owns for its own account approximately a 1.1% NSR royalty, or 31.4% of the existing 3.5% NSR royalties on the Hasbrouck Gold Project. ”
https://ceo.ca/@marketwired/west-kirkland-mining-buys-11-nsr-royalty-at-hasbrouck
$usdjpy up big today. Is it any wonder US markets are up and gold is down.
If $usdjpy busts through 115, I think it is going to go much much higher. Should be fun stuff over the coming months watching it break out.
The stochastics on the weekly chart are not yet in overbought territory. They have to hit overbought before there is any hope of a reversal IMO. As long as $usdjpy keeps advancing, US market will be propelled higher, commodities lower, and PMs lower.
Bitcoin Price Tops $1,700 to Set New All-Time High
Gold under 1220 at this moment, guess cryptos was the place to be.
Course who knows how low gold will get over the next month or three?
A bounce back should be profitable…..maybe.
gld should get its bounce right about here. That will form a nice right shoulder on a large head and shoulders (with an upward slanting neckline) on the daily chart.
GLD has now filled its March 16 gap but gold has only filled part of it. I agree that a low is forming here but do not share your belief in that a H&S will form.
http://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=0&mn=7&dy=13&id=p63102003706&a=521696971
Unlike gold and silver, the miners have not taken out their May 4 lows. That is positive.
http://stockcharts.com/h-sc/ui?s=%24XAU&p=D&yr=1&mn=0&dy=13&id=p95589745656&a=522088160
Silver looks like it is bottoming versus gold.
SLV:GLD
http://stockcharts.com/h-sc/ui?s=SLV%3AGLD&p=D&yr=1&mn=0&dy=13&id=p34565118763&a=522081264
(SOI) SIRIOS intersects 10.6m at 11.2g/t gold in the western area of Cheechoo
(Marketwired – May 9, 2017)
https://ceo.ca/@marketwired/sirios-intersects-106m-at-112gt-gold-in-the-western
That’s good news for Golden Valley (GZZ) as well.
$GZZ $GLVMF Golden Valley now owns 4,148,374 shares of $SOI Sirios, representing approximately 4.1% of the company.
Golden Valley also holds a 4% #NSR net smelter #royalty from all mineral products mined or removed from Cheechoo.
Notwithstanding the foregoing, the royalty relevant to gold mineral products mined or removed from Cheechoo may be reduced as follows depending on the market price of Gold at the time of the payment of the Gold Portion:
>If the price of Gold is less than $3,000 per ounce and higher than $2,400 per ounce, a 3.5% royalty on the Gold Portion shall be payable to Golden Valley;
>If the price of Gold is less than $2,400 per ounce and higher than $1,200 per ounce, a 3% royalty on the Gold Portion shall be payable to Golden Valley; and
>If the price of Gold is less than $1,200 per ounce, a 2.5% royalty on the Gold Portion shall be payable to Golden Valley.
Thanks Matthew. Looks like Fork Support is holding.
I’ve been a buyer there lately.
We have a double top forming in the gold-silver ratio:
http://stockcharts.com/h-sc/ui?s=GLD%3ASLV&p=D&yr=1&mn=1&dy=13&id=p88962273734&a=521820217
Miners are dead money or 2-3 more months IMO. In that time, the monthly bollinger bands will really start to narrow in. Between then and now, though they can and will take miners anywhere they want. I assume we will rally back or at least stay within spitting distance of the 20 month MA on GDX (21.65) before miners show their true hand in a few months. The monthly stochastics are pointing to 2-3 more red months IMO. They aren’t going anywhere.
GDX hasn’t had a monthly close below the 20 month MA since January, 2016. The sector has already tipped its hand and wants you to think it is a weak one.
You are going to miss everything if you focus on the monthly chart.
I just don’t see GDX consolidating forever above the 20 month MA. The consolidation/retracement off the top has not only been long in duration (which was expected) but it has been very very deep. The miners are in reset mode. the monthly MACD is potentially going to flip negative and the stochastics are for sure going to hit oversold before this is over. It’s possible the monthly stochastics turn up before hitting oversold, but that is not something to bank on. The usual course is to go from overbought to oversold, and the fact that we are below 50 on the full stochastics points to either red candles this month and next, or a very big red candle by the end of this month.
As long as a deep correction doesn’t change the big-picture bullish outlook, it should shorten the consolidation/correction time needed before the next up leg.
That’s exactly the type of correction we’ve had.
http://stockcharts.com/h-sc/ui?s=GDX&p=W&yr=3&mn=9&dy=0&id=p36702842441&a=522809896
I haven’t sold anything. I just think more pain is dead ahead.
You might be right, of course, but there’s a fair chance that this a significant low. The action and sentiment sure support that possibility and so does the fact that it is May. The shaking out of weak hands has to be very significant right now.
We’re now down 16 days in a row in Silver, so at least a few days – week or two rally is overdue, even if there is further to move downwards later in the Summer.
We aren’t down 16 days in a row in $silver though. Neither SLV. They both bounced for a single day–just enough to get the RSI to rise–and now back down we go as RSI diverges from price. For now, this looks exactly like November 2015. Just like back then we are going into the next FOMC meeting in the middle of the next month where they will raise rates. Expect more weakness all the way into that meeting. Any rally here will get the ever loving crap shorted out of it.
I think we will bounce for 1-2 weeks (maybe pretty hard) and then roll over and plummet in the metals and commodities. Silver should hit $14 with ease.
The FOMC meetings have become and absolute joke. As soon as the fed futures pop up over 70%, it’s license to short the crap out of the metals until the Fed actually pulls the trigger. Next FOMC is June 14. Anyone expecting a bottom significantly before then is nuts IMO. Any rally back to the declining MAs will have short sellers salivating. This is too easy to read now.
With the yen getting smashed today, you can guarantee a green close in the US markets.
Epstein metals TA
https://youtu.be/Ai0Dl0fW-mY?t=33